Legislature(1997 - 1998)
05/11/1997 11:20 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MAY 11, 1997
11:20 A.M.
TAPE HFC 97 - 138, Side 1, #000 - end.
TAPE HFC 97 - 138, Side 2, #000 - end.
TAPE HFC 97 - 139, Side 1, #000 - #2130.
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee meeting
to order at 11:20 A.M.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Representative Alan Austerman; Representative Gene Kubina;
Representative Jeannette James; Senator Robin Taylor; Joe Ambrose,
Staff, Senator Robin Taylor; Berne Miller, Executive Director,
Southeast Conference, Juneau; Kurt Parken, Deputy Commissioner,
Department of Transportation and Public Facilities; Gary Hayden,
Director, Alaska Marine Highway System, Department of
Transportation and Public Facilities; James Baldwin, Assistant
Attorney General, Department of Law; Roxanne Stewart, Staff,
Senator Jim Duncan.
SUMMARY
SB 21 An Act relating to ferries and ferry terminals,
establishing the Alaska Marine Highway Authority, and
relating to maintenance of state marine vessels; and
providing for an effective date.
CS SB 21 (FIN) was reported out of Committee with "no
recommendation" and with three attached amendments and a
fiscal note by the Senate Finance Committee dated
4/29/97.
SB 130 An Act amending the retirement incentive programs for
municipalities and school districts; and providing for an
effective date.
SB 130 was reported out of Committee with a "no
recommendation" and with a fiscal note by the Department
of Administration dated 4/29/97.
SENATE BILL 130
"An Act amending the retirement incentive programs for
municipalities and school districts; and providing for an
effective date."
ROXANNE STEWART, STAFF, SENATOR JIM DUNCAN, stated that SB 130
would allow school districts and municipalities to request one or
more window periods before 6/30/99, to allow their employees to
participate in the retirement incentive program.
The bill would allow school districts and municipalities to request
one or more window periods up until 6/30/99, with retirement
required within six months of the end of the application period.
That would give school districts and municipalities more
flexibility to address declining revenue over the same period as is
available under the State employees Retirement Incentive Program.
She stated that it would be in the best interest of our municipal
governments and school districts to allow them the maximum
flexibility to address declining State revenues and increasing
demands for public services through the use of the Retirement
Incentive Program (RIP).
Representative J. Davies asked who would make the final
determination of eligibility. Ms. Stewart stated that the school
board would make the decision as to whether a person could qualify.
Representative Foster MOVED to report SB 130 out of Committee with
individual recommendations and with the accompanying fiscal note.
There being NO OBJECTION, it was so ordered.
SB 130 was reported out of Committee with "no recommendation" and
with a fiscal note by the Department of Administration dated
4/29/97.
SENATE BILL 21
"An Act relating to ferries and ferry terminals, establishing
the Alaska Marine Highway Authority, and relating to
maintenance of state marine vessels; and providing for an
effective date."
JOE AMBROSE, STAFF, SENATOR ROBIN TAYLOR, stated that SB 21 would
establish an Alaska Marine Highway Authority to assume management
of the Marine Highway System from the Department of Transportation
and Public Facilities (DOTPF).
The Authority would be a public corporation of the State as an
extension of DOTPF, but would have a legal existence independent
and separate from the State. The new Authority would be comparable
to the Alaska Housing Finance Corporation (AHFC) or the Alaska
Industrial Development and Export Authority (AIDEA).
The powers of the authority would rest with a seven member Board,
appointed by the Governor. One member would be the Commissioner of
Transportation & Public Facilities. The six other members would be
required to have experience in maritime affairs, would serve
staggered five year terms and would be subject to legislative
confirmation. The Board would hire the system's director.
Mr. Ambrose continued, the establishment of such an authority board
would bring maritime experience, accountability and continuity to
the management of the Alaska Marine Highway System.
Based on information gathered at public hearings over the interim,
the Senate Task Force on the Alaska Marine Highway System concluded
that the Legislature should consider the creation of such an
authority. He noted that Senator Taylor supports the fiscal note
provided by the Senate Finance Committee.
Representative Mulder asked if there was a relationship between the
Authority and the Ketchikan shipyard. Mr. Ambrose stated that
there are provisions in the legislation that relate to Alaska base
maintenance facilities. Sections #21 & #22 more clearly define the
applications of that provision and that the sunset provision would
be repealed.
Representative Mulder asked if it would be in the State's best
interest to require the provision to keep the costs down. He felt
that the Ketchikan shipyard would loose the impetus to keep prices
competitive if there was such a dis-incentive. He noted his
support for maintaining the integrity of the Alaska Marine Highway
System and using the Ketchikan shipyard if their price was right.
Co-Chair Therriault suggested that it would be the work of the
Legislature to guard that provision. Representative J. Davies
questioned the indirect benefits calculation and asked if it would
be in violation of the indirect commerce laws. Mr. Ambrose replied
that the language in reference was language from the original
statute as passed in 1986, modified in 1992.
SENATOR ROBIN TAYLOR noted that the State currently owns both the
Seward and Ketchikan facility. He requested that Amendment #1 be
adopted. [Copy on file]. He clarified that the above mentioned
section would address the local hire concerns, while acknowledging
that there would be indirect benefits to Ketchikan such as
community employment, economics and utilization of Alaska hire.
Representative J. Davies questioned if there was case and decision
law record which establishes that a state attempting procurement,
could take direct benefits of the local economy into account.
Senator Taylor believed that could be resolved in the actual
activities.
Representative Grussendorf noted that he supported the initial
legislation in 1986 which granted that the major reconstruction
work to the ferries be completed in Ketchikan. He stressed that
action was not a savings to the State, although, was socially and
economically good policy. Representative Grussendorf voiced
concern with establishing a marine authority given the proposed
restrictions.
In response to Representative G. Davis, Mr. Ambrose commented that
most of the wording contained in Section #21 was taken from the
1986 legislation. He distributed a sheet of cost comparisons
between work performed in Ketchikan and work done in Seattle.
[Copy on file]. There is no longer a disparity between the costs
as seen in the analysis. He argued that there would be a savings
to the State for work done in the Ketchikan yard.
Representative Mulder questioned if savings in empowering the
employees had been considered. Senator Taylor agreed that those
employees would provide better service and administration in the
new system than they are currently receiving. He pointed out that
the action would require a liquidation of State assets. Senator
Taylor stressed that the entire economic life of Ketchikan is tied
to the ferries. He spoke to the composition of the board
membership.
Representative Mulder voiced concern with the Board's composition
when addressing policy concerns. He pointed out that there will be
individuals involved in the process with whom others work; he
suggested that would not be good public policy. Senator Taylor was
not willing to comment on the monetary terms regarding conflict of
interest. He stressed that information would not be involved in
the board's combination.
Representative Grussendorf voiced concern with the composition of
the board. The marine authority will always need State subsidy.
The manner in which the board is appointed will not address the
financial concerns of keeping the ferries running. Representative
G. Davis spoke to the conflict of interest concerns.
(Tape Change HFC 97-138, Side 2).
Mr. Ambrose stated that there has been a change in the worker's
viewpoint in the past couple of years. The proposed legislation
only changes the management at the top. The people who work for
the system, know that it is in jeopardy and the proposed
legislation has the possibility of ending the long conflict between
ship and the shore.
Representative Kelly echoed concern with the make-up of the board.
He thought it could be politically stacked as each category has the
potential to be a union person. Senator Taylor suggested that the
confirmation process would provide the necessary checks and
balances. He stressed that there was no intention to stack the
board, but rather to create a board with experience. He agreed
that the strongest and most effective board, would be the smallest
one. Representative Grussendorf questioned if the proposition
would create a more efficient structure than currently exists.
BERNE MILLER, EXECUTIVE DIRECTOR, SOUTHEAST CONFERENCE, JUNEAU,
pointed out that the Alaska Highway System is the "road" through
Southeast Alaska. The System is nothing more than the lifeblood of
our region's economic strength and social well-being. If the
System is allowed to atrophy, our region will wither and die.
He noted that the interest of the Conference would be in the
economic and social well-being of Southeast Alaska as a region.
The system is important to our region's people and communities and
to give any priority to passage or defeat of any particular
legislation or to seek political alignment with any of the
contending factions would not be appropriate. The Conference
advocates common sense and careful deliberation in public decision
making.
Representative Grussendorf pointed out that many members of the
Southeast Conference are against the proposal. Mr. Miller
responded that the Board of Directors believes that the system is
too important to launch off on major changes without some
understanding of the consequences to the communities.
Representative Grussendorf pointed out that a Marine Highway Task
Force has been established in the House and Senate, with the intent
to address these concerns during the interim. The proposed
legislation is being expedited by Senator Taylor at a time when it
needs further consideration.
KURT PARKEN, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, stated that the Department does not support the
legislation because it would not be in the best interest of the
employees or the communities. He added that a number of
communities and unions throughout the State oppose the legislation.
He agreed that the Alaska Marine Highway System does have
management problems, although, an authority would not guarantee a
stability in funding nor would it guarantee adequate staffing for
marketing and reservations. Creating an authority could separate
the Marine Highway System from receiving the combined federal
Intermodal Surface Transportation Efficiency Act (ISTEA) dollars.
Mr. Parken enumerated specific problems in the proposed
legislation. He noted that there is not reference in the bill on
how the transfer of assets from DOTPF to the Marine Highway
Authority would take place. Also, the Department believes that
there are serious constitutional problems with the confirmation
process for the board. The Legislature can not confirm
appointments to an authority, and that the definitions of
responsibilities are inconsistent in the text of the bill. The
bill will create four new collective bargaining units.
Representative Grussendorf noted that the Commissioner of DOTPF
would be responsible for the allocation of federal ISTEA dollars.
He questioned, with the creation of an authority having State
subsidy, would federal receipts continue to be allocated for the
building of a new vessel. The entity allocating federal funds
would be more carefully spent on renovation repair for the boats.
He felt that passage of the legislation would jeopardize the Marine
Highway System and would place political pressure on the
Commissioner.
Representative J. Davies requested an overview of the major cost
items associated with the creation of the authority.
GARY HAYDEN, DIRECTOR, ALASKA MARINE HIGHWAY SYSTEM, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, explained that the fiscal
note contained funds for paying for meeting days. The Department
made the assumption that after January 1st, there would be 50
meetings for the first year. That compensation would amount to $54
thousand dollars. Travel and per diem would amount to $75 thousand
dollars on an annual basis. The fiscal note assumes that the
authority will need to add $195 thousand dollars to cover the
vacancy by deleting the director position. These expenses are
included in the proposed fiscal note from the Department.
JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,
stated that the Department opposes the proposed legislation. He
noted that there are provisions which do not follow the State
constitution regarding confirmation of board members. It was
established by the State Supreme Court that the Governor's
confirmation power does not extend beyond the specifically
enumerated occasions as contained in the Alaska Constitution. The
proposed authority does not qualify as that type of entity.
The Legislature could not provide for the removal for clause
provision as suggested in the legislation. The effect of that
clause, if the performance is not adequate, it would have to reach
a high level of non-performance before they could be removed. He
requested that the Committee seriously question the language of the
legislation.
Mr. Ambrose referenced Page 4, Line 19, which clarifies that the
authority would be a regulatory board. Co-Chair Therriault asked
if the regulatory power was incidental to the board or commission
or would it be their main function. Mr. Ambrose replied that issue
had not been addressed with Legal Services when the legislation was
drafted.
(Tape Change HFC 97-139, Side 1).
Mr. Baldwin noted that the State Constitution interrupts a
regulatory board as a board that is regulating an enterprise, a
business or a profession. It does not mean something that has the
power to adopt regulations to place in statute.
In response to Representative Martin, Mr. Ambrose explained that
the situation between the Alaska Railroad and the marine highway
were different. The railroad is independent, whereas, the proposed
changes to the marine highway would continue to remain an agency of
State government. Mr. Baldwin explained that the public
authorities are established as a political subdivision of the State
making them separate from the principle departments.
Representative G. Davis MOVED to adopt Amendment #1. [Copy on
file]. He stated that the amendment would remove the section which
gives priority to the Alaska ports and shipyard facilities,
maintaining the status quo. Mr. Hayden added, the current wording
would have the inter-port differential only pertaining to the work
done out of State. The intent is to have an inter-port
differential for both in State and out of State work.
Following the discussion between Representative J. Davies,
Representative G. Davis and Mr. Hayden regarding the proposed
language of the amendment, there was NO OBJECTION and it was
adopted.
Representative G. Davis WITHDREW Amendment #2. [Copy on file].
Representative Foster MOVED to adopt Amendment #2 which speaks to
the membership of the authority. Representative G. Davis noted
that the amendment would remove the specific designation of union
members. He said that following the discussion with Senator
Taylor, he now more clearly understands the need to consider those
members. Representative G. Davis OBJECTED to Amendment #2.
A roll call vote was taken on the MOTION.
IN FAVOR: Foster, Therriault
OPPOSED: Martin, Moses, J. Davies, G. Davis,
Grussendorf, Kelly, Kohring
Representatives Mulder and Hanley were not present for the vote.
The MOTION FAILED (2-7).
Representative G. Davis WITHDREW Amendment #3. [Copy on file].
There being NO OBJECTION, it was withdrawn.
Representative Grussendorf MOVED to adopt Amendment #4. [Copy of
file]. He explained that the amendment would require that a plan
be presented which would include in detail the amount and funding
sources needed for the operating and capital improvements of the
Alaska Marine Highway System for five consecutive fiscal years.
Mr. Ambrose responded that the sponsor would not object to the
proposed amendment. There being NO OBJECTION, Amendment #4 was
adopted.
Co-Chair Therriault advised that the House Finance Committee had no
ability to fund the fiscal note; currently, the operating budget
has been closed out. He recommended adding an adjustment to when
the bill could be implemented. Mr. Ambrose acknowledged that would
be acceptable.
Co-Chair Therriault MOVED a change to Page 23, Line 4, deleting
12/01/97 and inserting 7/01/97, and Page 23, Line 9, deleting
1/01/98 and inserting 1/01/99, to accommodate fiscal concerns.
There being NO OBJECTION, it was adopted.
Representative Moses voiced his opposition to the appointment of
the director position. Representative Foster strongly objected
that only one person on the authority would be representing the
public.
Representative Hanley MOVED to report CSSB 21(FIN) with the
attached amendments #1, #4, & #6 and individual recommendations out
of Committee. Representative Foster OBJECTED.
A roll call vote was taken on the MOTION to move the bill from
Committee.
IN FAVOR: G. Davis, Kelly, Kohring, Martin, Therriault,
Hanley
OPPOSED: Moses, J. Davies, Grussendorf, Foster
Representative Mulder was not present for the vote.
The MOTION PASSED (6-4).
CSSB 21 (FIN) was reported out of Committee with the attached
amendments #1, #4 and #6 with a "no recommendation" and with a
Senate Finance Committee fiscal note dated 4/29/97.
ADJOURNMENT
The meeting adjourned at 1:30 P.M.
**FIN131PM
| Document Name | Date/Time | Subjects |
|---|